National Payments Corporation of India (NPCI) on Wednesday said has permitted the PPI wallets to be part of interoperable UPI ecosystem and levied 1.1 per cent charge on unified payment interface (UPI) transactions above ₹2,000 while using PPI.
"The interchange charges introduced are only applicable for the PPI merchant transactions and there is no charge to customers, and it is further clarified that there are no charges for the bank account to bank account-based UPI payments (i.e. normal UPI payments)," it said.
These new guidelines are set to become effective from April 1st. The new interoperability of KYC wallets is not just like driving fintech companies' revenue but is also a significant development for UPI merchants.
Prepaid payment instruments (PPIs) help facilitate the purchase of goods and services, including financial services, remittances and fund transfers to family and friends against the value stored on such instruments.
The value stored in the instrument is represented by the value that has already been paid for by the holder or the instrument by any method such as, by cash, by debit from a bank account, credit card or even from other PPIs.
PPIs can come in the form of payment wallets, smart cards, magnetic chips, vouchers, mobile wallets etc. any instrument that can be used to access a prepaid amount is a PPI.
The guidelines make wallets more appealing to customers by opening up newer use cases of payments. It will eliminate the need for customers to carry multiple cards, thereby reducing fraud and theft due to the exposure of card numbers, said Akash Sinha, Co-founder & CEO, of Cashfree Payments.
“Many merchants use wallets for accepting customer payments, for instance, at PoS. Interoperability will significantly ease collection for them since it will allow merchants to accept wallet payments regardless of the wallet being used by the customer. Further, it will eliminate the need for specific integrations with a particular wallet to accept payments on a website since customers can also pay via UPI or card infrastructure. This will increase the payment alternatives for customers,” he said.
National Payments Corporation of India (NPCI) on Wednesday said there is no charge for the bank account to bank account-based UPI payments or normal UPI payments.
However, interchange charges are only applicable for the prepaid payment instruments (PPI) merchant transactions and there is no charge to customers, NPCI clarified in a statement.
NPCI has permitted the PPI wallets to be part of interoperable UPI ecosystem and levied 1.1 per cent charge on unified payment interface (UPI) transactions above ₹2,000 while using PPI.
"The interchange charges introduced are only applicable for the PPI merchant transactions and there is no charge to customers, and it is further clarified that there are no charges for the bank account to bank account-based UPI payments (i.e. normal UPI payments)," it said.
With this addition to UPI, the customers will have the choice of using any bank account, RuPay Credit card and prepaid wallets on UPI-enabled apps, it said.
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